Allied Machinery(SH:605060) Guotou Securities·2024-04-02 16:00Investment Rating - The report maintains a "Buy - A" rating for the company with a 6-month target price of 20.48 CNY, while the current stock price is 17.06 CNY [18][21]. Core Views - The company is expected to maintain stable profitability in 2024, driven by the reduction of losses in subsidiaries and the efficiency improvements from ongoing projects [17][21]. - The company has shown resilience in its gross margin, which stood at 37.37% in 2023, reflecting a slight increase of 0.9 percentage points year-on-year [17]. - Revenue for 2023 was reported at 1.2113 billion CNY, representing an 8.09% increase year-on-year, while net profit reached 251.3 million CNY, up 1.45% [16][17]. Financial Performance Summary - Revenue and Profit Forecasts: - 2023 revenue: 1.2113 billion CNY, 2024 forecast: 1.5215 billion CNY, 2025 forecast: 1.8516 billion CNY, 2026 forecast: 2.2668 billion CNY [22]. - Net profit for 2023: 251.3 million CNY, 2024 forecast: 308.4 million CNY, 2025 forecast: 380.6 million CNY, 2026 forecast: 481.9 million CNY [22]. - Profitability Ratios: - Gross margin: 37.37% in 2023, net margin: 20.59% [17]. - Earnings per share (EPS) for 2023: 1.04 CNY, with forecasts of 1.28 CNY for 2024 and 1.58 CNY for 2025 [22]. - Valuation Metrics: - Price-to-earnings (PE) ratio forecasted at 13.7 for 2024, 11.1 for 2025, and 8.8 for 2026 [22]. Capacity Expansion and Market Strategy - The company is actively expanding its production capacity, with significant projects underway, including a new facility in Mexico aimed at producing precision components [21]. - The company has established a solid foundation for long-term growth, focusing on new markets and customer segments [5][21].